Europe’s economy has been zombie-like for quite some time and news today of record unemployment suggests that things aren’t going to get better anytime soon. The Euro Zone has been in its longest recession since it was created in 1999. Inflation is also well below targets set forth by the European Central Bank. Unemployment in the EU is now a stunning 12.2%.
Almost two-thirds of young Greeks are now without jobs and France continues to see record unemployment as well. Italy has not seen much improvement despite a recent election and President Giorgio Napolitano being chosen for a second term. Many were hoping the elections would provide much needed stability and reform in Italy, but so far things continue to be dismal. Finland and the Netherlands both contracted in the first quarter.
Germany, the EU’s financial leader, has its own election coming in the fall and as such may not be able to be as proactive as some would like. France’s President Hollande suffers from a 24% approval rating. These facts leave many asking who can step into a role of leadership in the EU? There don’t appear to be many candidates.
The combination of political failure and uncertainty along with continued economic stagnation leaves little hope for improvement. The question that is weighing on the minds of many is whether the EU will be able to avoid a break-up. Momentum in Great Britain for leaving the EU is growing and even in France only 41% of people look on the EU favorably. We could indeed see the end of the Euro Zone in a few short years.
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